Can we retire please? How much money do you really need need?

[gus-lopez]

Mrs mikebeaches and I both have no 'earned' income as pensioners. BUT we both make a net contribution of £2,880 per annum to our SIPPs (self invested personal pensions). And the tax man kindly adds £720 each year, making a gross contribution of £3,600 pa.

Not a huge sum, but it all adds up over the years and coupled with decent investment performance, usefully boosts the value of the pots.

Why would "pensioners" pay in to a pension fund?? That's lost me?

Paying a lump sum to gain missing NICs years retrospectively so you qualify for a bigger State Pension is a bit of a bargain. The lump sum pays for itself very quickly. You have to be careful because the Rules are a minefield.

Anyone retiring after 2016 and under the new state pension scheme needs to ensure that any payments they make will actually count towards state pension. Usually any for the years before 2016 will count for nothing.

I gave up work in 2002. We've lived on funds from sale of house uninvested and with no income until I received state pension this May. The small private pension pot that I transferred out of UK ,just before Osborne changed the rules, was stolen.
Fortunately having no wish to holiday, don't drink, stopped smoking & with no interests or hobbies that need funding I don't need much.

 

[Paddywack]

I retired in September when 56, Mrs semi retired a few years ago. We have friends similar ages who also looked at/are retiring. Guestimates of required annual income for a couple were from £28,000 - 40,000, A LOT is a case of it depends. Sit down write down all your current expenditure, now add in the exceptions - the holidays, the new kitchen in ten years, replacement car every five/ten years etc etc. Then add in a emergency fund for when your washing machine blows up / clutch breaks. The good news is that you spend less as you get older, it's the early years when you're more active you'll need more.

Your £20,000 looks low to me, I'm not saying it cant be done, others on here prove otherwise- it all depends on the lifestyle you want. But if you can pick up part time work then I'd say you could make it work.

Don't presume the state retirement age will remain the same, there's already been talk of it moving to 75, so plan without it, if it stays where it is you are quids in.

By all means factor in the downsize / equity release but this should be 20 years down the line not at your current age.

For us it was a run in with the big C that crystallised our thoughts that it's not a rehearsal, but we did the sums and then did them again before making the jump.

 

[bigtwin]

But he suggested the additional payments kept him out of the higher rate tax bracket?

Yes, that’s the very reason he did it. Had he not put that money into the pension fund he’d have paid 40% tax on that money and received only 60% of the value; therefore, by paying them into the pension fund he saved 40% tax and 100% of his money went into the fund.

Ian

 

[Paddywack]

Yes, that’s the very reason he did it. Had he not put that money into the pension fund he’d have paid 40% tax on that money and received only 60% of the value; therefore, by paying them into the pension fund he saved 40% tax and 100% of his money went into the fund.

Ian

You are of course right, sorry I'm have a thick attack!

 

[Hazbeanz]

Not one to be casual about, but provided you accept you cannot live as you were living with a nice fat salary, things can be managed. I think the minimum is 1200 a month is full time in a motorhome, we help our finances by house sitting and pet sitting ( trusted housesitters.com ) whilst doing a sit, you are not spening on fuel and campsites, so far the sits have been so good (UK, France and Spain) we are thinking of just doing the house sitting, but we will see how our first year of being Itinerants goes. Frankly I was as worried as you are, but it can be done, we live on so little and yet we travel and have fun. You will need to have a contingency fund for the unexpected... just in case. Think £10,000 ish and you have most things covered. More is better of course. Its a great bunch out there, snowbirds going south for the winter, wanderers and the like, all very helpful to newbies. Good luck, Steve

^{_{Subscribers  do not see these advertisements}}

 

[billym]

£15000 is absolute bare minimum in my opinion .

However, we have been there and done that ( although we have taken all sorts of crap short term jobs as and when required. )

The hard part is learning quickly not to spend on things you can do without. It is difficult!

My advice would be that if you are not both committed to doing it , forget it as it would lead to conflict.

If you are both committed just do it. Why not?

 

[mikebeaches]

Why would "pensioners" pay in to a pension fund?? That's lost me?

1. The 'saving' habit is a lifetime thing and doesn't stop just because we are retired.

2. It is particularly handy to have the Government make a useful contribution each year (£720). Mrs mikebeaches isn't even a tax payer and hasn't been for decades, but still receives the tax rebate contribution!

3. As mentioned in another post - pension funds sit outside the inheritance tax net.

 

[Henry Walpole]

One thing I would recommend is tracking your expenditure now. For the last five years I’ve tracked all our expenditure using an app called Account Tracker (other similar apps available). It’s really useful to know ahead of retirement just how much you spend and where your money goes.

The other thing is to make every pound of savings work for you. In this low interest rate environment you should only have emergency money in cash. The rest you need to have working for you in the stock market.

 

[billym]

There are blogs out there with breakdowns of expenses on the road.
Here are two popular ones for starters.

Our Bumble blog
Our Tour blog.

Worth a look

 

[The Wino]

One thing I would recommend is tracking your expenditure now. For the last five years I’ve tracked all our expenditure using an app called Account Tracker (other similar apps available). It’s really useful to know ahead of retirement just how much you spend and where your money goes.

The other thing is to make every pound of savings work for you. In this low interest rate environment you should only have emergency money in cash. The rest you need to have working for you in the stock market.

Only if you can afford to lose a significant amount if things go wrong

^{_{Subscribers  do not see these advertisements}}

 

[mikebeaches]

Only if you can afford to lose a significant amount if things go wrong

?Are you referring to the stock market?

 

[Brimal]

Help. We are looking for some real world advice on if we are near or have already reached the point of retirement.
I have 8 years to pension age the better half has 2 years and both of us have had enough of being beholden to work. The better half has a few issues we feel its time to enjoy life.

Being very lucky to have paid the mortgage and the motorhome and the bills are just everyday stuff from having a property. We don't really want to full time so having done the maths I think we can do it

Ive broken everything down that we can think of insurances, services to car and motorhome, gas electric etc multiplied and divided and computer says yes it can be done. Just.
Happy days.
But the question is? Is there an amount, a real world figure people have found they require. A couple we saw a few weeks back said friends of them had set a target of £15000 per year to live off and only spent £13000. This seems to match our figures. So is this figure realistic? Do you already live on a smaller budget?
New decade new life Any advice is helpful

2003 then aged 52, I was offered a chance of early retirement, after deep discussion with missus, both decided we should go for it and see how we go. Early retirement on 53rd birthday, had exchanged caravan and car for motorhome moved to a smaller cheaper home (missus decided she wanted a brick n mortar base) and off we went on a 9 month tour of mainland Europe (had to come back for a previously booked holiday).
We were during this period aware of our financial status so did cut our cloth etc but after a 12 month travelling and reallying enjoying our life we sat down had a 'deep' discussion (lasted less than a minute) which the missus says, "well I'm not going back to work". So here we are still enjoying the life and having travelled all over Europe in the MH and beyond on fly aways.
So to us the answer is Go For It, you only got one Life.

 

[The Wino]

?Are you referring to the stock market?

Yes that's what was in the post I replied to.

 

[EuroTrotters]

I could bore you to tears on this subject,

We are both still kind of working and I won’t go into personal finances.

I was talking to someone the other day, a pension advisor, suggested a million each in pensions is good enough.

I met two retired coppers, a married couple both the aforementioned, well only one now as he died.

I know lots of people with very little money, very happy and many with lots, not so happy.

If you have £250,000 at 60-67 years old. Why not, go for it.

Anything less, may be a bonus. You will get taxed on anything you earn over a certain criteria

 

[mikebeaches]

Only if you can afford to lose a significant amount if things go wrong

Yes that's what was in the post I replied to.

Admittedly, it's possible to lose money in the short term, but if you are able to take a longer term view and invest sensibly, it's pretty unlikely to 'go wrong'.

Although I invest in various individual stocks, I also believe in putting reasonable sums into low-cost passive funds (trackers). But everyone has their own approach.

For the last decade in particular, keeping too much money in cash has been totally unproductive.

After investing for more than quarter of a century - and only occasionally selling (ie not regularly trading stocks - prefer to buy and hold) - returns have been good, especially with reinvestment of dividends and the compounding effect. Yes, there can be ups and downs in the markets, but it is just a case of keeping faith.

^{_{Subscribers  do not see these advertisements}}

 

[bill1950]

I was forced into retirement when wife decided to have a heart attack. Im now a house husband !! The main thing to remember is income £1 outgoings 99p = bliss income £1 outgoings £1.01p = misery. No matter how much you have you live within you means.

 

[h1ghway1]

Bill,

Thats awful for both of you... do look around for support groups close to you that can help both of you..best wishes..

 

[Wh05apk]

Ultimately we are all different with different priorities, for us, until the last couple of years we have never really had a lot of income, so have lived frugally, when away we very rarely eat out, or drink in bars, so our expenditure is low, I read of others on here who rarely cook in their vans and eat out all the time, for them they will need far more than us.
When I do retire, hopefully soon, it will be final, I have no intention of going back, so I want to make sure once the decision is made we will be "comfortable" with the funds to replace our van/car when required.
Unfortunately, we all get to this stage in our lives, thinking we have got a long future, but some start to suffer Ill health, or worse, we are the lucky ones, as I'm sure most of us have lost friends/colleagues at a similar age?

We are only here once, so make the most if it.
YOLO.

 

[buttons]

Ultimately we are all different with different priorities, for us, until the last couple of years we have never really had a lot of income, so have lived frugally, when away we very rarely eat out, or drink in bars, so our expenditure is low, I read of others on here who rarely cook in their vans and eat out all the time, for them they will need far more than us.
When I do retire, hopefully soon, it will be final, I have no intention of going back, so I want to make sure once the decision is made we will be "comfortable" with the funds to replace our van/car when required.
Unfortunately, we all get to this stage in our lives, thinking we have got a long future, but some start to suffer Ill health, or worse, we are the lucky ones, as I'm sure most of us have lost friends/colleagues at a similar age?

We are only here once, so make the most if it.
YOLO.

YOLO by George the poet. As an honors grad from Oxford George should know you only live once.

 

[RowleyBirkinQC]

I was talking to someone the other day, a pension advisor, suggested a million each in pensions is good enough.

I suspect that sort of figure is largely unattainable for many/most given the lack of growth in pension investments over the last few years, coupled with cost of living eroding spare income for additional investments etc.

^{_{Subscribers  do not see these advertisements}}

 

[Wh05apk]

I suspect that sort of figure is largely unattainable for many/most given the lack of growth in pension investments over the last few years, coupled with cost of living eroding spare income for additional investments etc.

Most pension funds have been doing very well over the last few years.

But agree £1m for most is totally incomprehensible, and would provide an extremely nice income.

 

[Ditcha]

One thing that runs right through this thread so far is nobody regrets retiring everybody's lifestyles are different human nature you always adjust to your own needs and manage on what you have.

Go for it

 

[EuroTrotters]

I suspect that sort of figure is largely unattainable for many/most given the lack of growth in pension investments over the last few years, coupled with cost of living eroding spare income for additional investments etc.

Yes, I agree.

Unless you were one of the older civil servants, invested highly in pensions or properties, inheritance or a lottery win. No chance

 

[Peskyrabbitt]

My Wife and I both worked hard and had good jobs, saying this I doubt We would have had enough of a pension as recommended by the recent tv programme.We are both in our early 50s and now Neither of us work due to my Wife taking ill a couple of yeas ago and me now her full time Carer. I also lost my Father to illness who never got to enjoy his retirement. My advice to you is to enjoy life now as you don,t know what is around the corner.

 

[Innkeeper]

Yes. We were thinking of this option. Quite fancy a bit of grape picking in Bordeaux for free parking

There is a website called work away. The idea is you work 5hrs a day 5 days a week for food and bed/parking. It started for students on a gap year but now the grey brigade have got onto it.
We were looking into this year. But then wife broke her arm not very good for olive picking.

^{_{Subscribers  do not see these advertisements}}

 

[42208]

I retired in my late 50's, the main criteria were savings and income with savings holding equal importance for a comfortable retirement. Retiring in your 50's means your cars and van are going to need replacing multiple times, your double glazing maybe twice, your bathrooms two or three times, furniture, fences, multiple holidays now that you have the time and health and of course your rainy day pot. It adds up to a substantial sum if your income is low, the higher your income the more you can pay for these things out of income, so I would say if you want to retire on the low income you suggest you will need to make sure you have a substantial savings pot behind you.

 

[Baggydave]

i Retired at 60 when my company pension kicked in. My partner at 58 Due to disability.
we Bought(4K) an ex local authority disability bus & converted it to suit our needs.

Our little House, bought many years ago, was already paid for.

we manage easily on £1200 a month but seldom eat out expensively & live simply. Neither of us feel we miss out or lack anything & feel fortunate we can do what we do.

trips are 3 months duration in eu & in the uk for jul/aug/sept. We don’t do hot!
longer trip in winter on site mostly (Portugal) & we leave the Van & fly back for Christmas .
when touring we freecamp or use aires mostly. But ALWAYS make a point of spending locally to give something back & NEVER freecamp longer than two nights in one place.

travelling is such fun & we have met so many lovely folk.
best two trips so far were Greece via Albania & Romania etc & following the Danube through Serbia & Bulgaria.

I cannot recommend it enough.

 

[Camdoon]

I retired when my company pension kicked in. We are waiting for our last to finish school before the wife retires.
Having a part time job is great if you don't need the money. No corporate and walk if they annoy you. There are loads of part time and seasonal jobs.

 

[Lenny HB]

One thing I would recommend is tracking your expenditure now. For the last five years I’ve tracked all our expenditure using an app called Account Tracker (other similar apps available). It’s really useful to know ahead of retirement just how much you spend and where your money goes.

We use a very old program MS Money, the latest version we have is 2001 but it still works in Win10. My wife has tracked every penny of our income & expenditure for the last 25 years.
She can tell me anytime how much cash we have the state of our investments. That's a lie she doesn't tell me, I find out we have loads of money and she still won't let me spend it. She is determined to take it with her.?

 

[Paddywack]

We use a very old program MS Money, the latest version we have is 2001 but it still works in Win10. My wife has tracked every penny of our income & expenditure for the last 25 years.

Don't worry some on here are still using an abacus and think of it as cutting edge!

^{_{Subscribers  do not see these advertisements}}